GE/Mckinsey Matrix

The GE/Mckinsey 9 cell matrix, named after General Electronics was first developed by Mckinsey. The objective of this matrix is to assess the industry attractiveness and competitive strength of strategic business units.
  • Factors affecting the industry attractiveness are market growth rate, market size, demand variability, market profitability etc and all these factors are external to the organization.
  • Internal factors such as assets, competencies, brand strength, profit margins and quality etc make a competitive strength or business strength of organization.
The important advantage of GE matrix is Portfolio analysis. Let’s take the example of Patanjali for the application of GE matrix.
  • Patanjali’s Dantkanti, Honey and Ghee operate in the green segment giving the organization opportunities to go ahead and grow & build the product. The green zone pushes an organization for expansion strategies.
  • Patanjali’s Candy, Fruit juice, and medicines takes place in yellow category signifying that brand should hold the product for some time and makes necessary developments. The yellow area suggests making strategies aimed at maintaining stability.
  • Patanjali’s Home care category like agarbatti, dish wash bar etc comes under red area due to the presence of other strong competitors. The red segment signifies that company should start harvesting the brand. Brand harvesting means maximizing your profit by reducing your expenditure on brand due to its decline phase in product life cycle.
Source: http://bit.ly/2vct8e6 / http://bit.ly/2wALvYj

 

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